Joseph Choi - 1,000 Hours of Studying The Most Profitable Apps in 17 Minutes

And all of this starts with why most people have the basic economics of app growth completely backwards.

So here's a conversation I have all the time.

A founder will message me, typically someone in the $1 to $5 million ARR range, and they grew their app mostly through Facebook ads.

And clearly the ads worked for them, But when the same founders look at these teenagers blowing up on TikTok that vibe coded a random app and they're hitting these insane revenue numbers, there's this FOMO, like, how are they doing that? And they get a little bit insecure, you know, like, am I falling behind? My ads keep fatiguing.

I'm on this treadmill of continually making new creatives and trying to scale.

And these kids are just like posting videos.

So let me just lay out the math.

Paid ads typically run at 10 to 30% margin.

That's the standard that I've seen, which basically means that if you spend $10, you're going to make back $11, $12, maybe $13.

Everyone says ads are the most scalable channel.

And yes, they kind of are.

But the problem is it never stops.

Your ads will get old once you've saturated the audience it gets shown to.

So you constantly need new angles.

But on the other hand, organic content runs at 50% to 80% margins.

This is what I've seen from mass UGC campaigns with apps.

I'm going to explain how in a bit, but let me just tell you the downside first.

So when you're running ads, you're basically buying people's attention.

The distribution problem is handled automatically and you just focus on the conversion.

On the other hand, organic content flips that completely.

So nobody's going to watch your video just because you posted it.

You have to earn every view while also making sure that the content sells the app without making it feel like an ad.

This sounds impossible, but this is exactly what the vibe coders are doing right now.

It just takes one video to go viral.

And just like that, you've got like 50,000 downloads.